Digital Wallets Are the Future of Money
Civic Wallet, launching at the end of this year, promises to completely change the crypto wallet landscape. The new app combines identity and payment functionality built on top of Bitgo’s multisig technology to make transactions more private and convenient than ever before.
The multisig capability adds an extra verification step to sending and receiving payments. People using the Civic Wallet will have the ability to recover their funds should they lose their phone or access to their wallet. This is a huge improvement to the way most cryptocurrency wallets now operate without offering an easy backup mechanism or by simply holding the money in a centralized wallet, with the hacking risks attached to that method.
More importantly, users will be able to rely on Civic Wallet as a convenient and flexible payment method. Users can use the app to pay at vending machines and select vendors, or use their identity to purchase things like age-restricted products anonymously. Send money to friends and family in just a few clicks, prove your identity, or complete a payment without ever taking out your physical wallet. This is what makes Civic Wallet different.
The Rise of Digital Wallets
A crypto wallet is a secure, digital wallet that allows you to send and receive digital currency. A true crypto wallet, unlike a physical wallet, a custodial or exchange wallet, or bank account, doesn’t “control” currency. It operates similarly to a service like Venmo or Paypal, moving money between two parties. Most wallets store a user’s public and private key and connect with vendors and other users to monitor balances and send or receive money. When setting up a crypto wallet, a user sets up an account and stores his or her private key supplied by the wallet provider. Then, when it comes time to make a purchase, the user decides how much crypto they want to send from their account and the transaction is securely and anonymously (or pseudonymously) recorded on the blockchain.
Crypto wallets have become increasingly popular in recent years: for example, over 36 million crypto wallets have been created since 2012. Traditional crypto wallets provide security, convenience, and an up-to-date ledger of your transactions. Many cryptocurrencies have their own official wallet, but there are a range of crypto wallets to choose from – some of which store more than one type of coin. Like Venmo, Cash App, Paypal or another peer-to-peer network, most crypto wallets give you the ability to send and receive crypto from friends and family.
In the past, there have been some major challenges to using a crypto wallet that prevented the everyday person from adopting this technology. Crypto wallets can be broken out into two broad categories: those with a user interface, and those without. The latter category requires some background technical knowledge of how to work with command-line interfaces, automatically disqualifying some users from adopting crypto wallets to manage their transactions. Civic Wallet falls into the user-friendly category, with a straightforward interface that makes it easy to pay, while keeping money safe and giving users full custody of their funds.
What are the drawbacks of current crypto wallets out there?
Crypto wallets have come a long way, but there are some key drawbacks to the options on the market today.
The first issue: current crypto wallets lack a reusable verified identity. In most crypto wallets, the only way to access your digital is through a private key. That means when a user accesses their cryptocurrency wallet, their account isn’t linked to a form of identity. Therefore, a hacker or bad actor only needs to access a private key to infiltrate the wallet. While private keys are mostly secure, devices are not. For each machine that stores a single-key wallet, that machine represents a weak point that can be infiltrated by a hacker, bad actor, or malware.
Civic Wallet uses identity to make our wallet more secure. A user’s identity is verified using biometrics and government-issued IDs. The goal is to enable users to selectively share parts of their identity for transactions that require both money and authentication. Hacking is almost impossible thanks to face recognition and liveness tests combined with ID document verification. This combination gives consumers and businesses an extra layer of safety when completing their transactions.
Historically, when a user lost his or her private key, it meant their wallet became permanently inaccessible. Analysis by the Wall Street Journal found that Bitcoin users have “misplaced” roughly 20% of existing tokens, the financial equivalent of around $20 billion due to locked wallets.
Civic Wallet is built using Bitgo’s enterprise-level multisig technology. Now, users have a way to recover funds if they misplace their private key. Multisig, short for multi-signature, requires more than one signature, or user verification, in order to transfer funds. This extra element safety promises to transform crypto wallets from being used only by crypto enthusiasts and early adopters to gaining mainstream prominence.
We’re leading the way in building a wallet that’s aimed at mainstream consumers. We’re excited to show how adding an identity component and multisig security step can transform the crypto wallet for the mainstream investor. Stay tuned as we release more product updates this fall!